Federal Reserve Governor Lael Brainard speaks at the John F. Kennedy School of Government at Harvard University in Cambridge, Massachusetts, USA, on March 1, 2017.
Brian Snyder | Reuters
Unemployment for lower-wage workers in the U.S. is over 20%, a figure that Federal Reserve Governor Lael Brainard said he underscores the importance of aid policy for the economy.
The figure indicates how uneven the recovery has been since efforts to control the Covid-19 pandemic resulted in the biggest quarterly decline in GDP since the Great Depression.
“The damage from COVID-19 is concentrated among groups already challenged,” Brainard said in a speech on Wednesday. “The K-shaped recovery remains very uneven, with some sectors and groups
experiencing substantial difficulties. “
At a time when the national unemployment rate has dropped from the peak of the pandemic from 14.7% to the current 6.7%, Fed economists estimate that the unemployment rate for the lowest earnings quartile is “probably above 20 percent, “said Brainard.
This is because the unemployment rate for blacks is 9.9% and the rate for Hispanics is 9.3%, while the rate for whites is 6%.
Fed officials prioritized “inclusive” job gains and adjusted the policy to try to make it happen. A new approach will allow inflation to exceed the Fed’s 2% target and the unemployment rate to fall below what was traditionally an indicator of higher inflation before the Fed raised interest rates.
In recent days, central bankers have offered somewhat different views on the future of politics, with some concerned about rising inflation more quickly than expected.
Brainard did not commit to a deadline for policy adjustments, but noted that “the economy remains far from our goals”.
“We are strongly committed to reaching our maximum employment and average inflation targets,” she said. “It is too early to say how long it will take. The Committee has clearly stated that it needs to see substantial progress towards our goals before adjusting purchases.”
The Fed chain is buying at least $ 120 billion in bonds a month and has kept its benchmark short-term loan rate anchored close to zero. Fed officials continued to ask Congress for more fiscal aid.